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Jun 12, 2017 | 09:15 GMT

8 mins read

In Mexico, a Political Straitjacket for Populism

The results of the June 4 gubernatorial election in Mexico state confirmed that the National Regeneration Movement (Morena) is a force to be reckoned with.
(Pedro Pardo/AFP/Getty Images)
Forecast Highlights

  • The results of the June 4 gubernatorial election in Mexico state suggest populist candidate Andres Manuel Lopez Obrador could seriously challenge the ruling Institutional Revolutionary Party in the presidential election in July 2018.

  • If Lopez Obrador is elected president, Mexico's foreign policies, particularly its relationship with the United States, will remain largely unchanged.

  • Congressional divisions would likely prevent any populist measures from Lopez Obrador from taking effect. Meanwhile, other domestic constraints would limit his ability to keep additional campaign promises.

Mexican elections are getting more competitive, but even if next year's presidential race brings a change in government, the country's policies will largely stay the same. For more than a year, polls in Mexico have suggested that the relatively new National Regeneration Movement (Morena) — a populist party formed by three-time presidential candidate Andres Manuel Lopez Obrador — stands a real chance of winning the presidency. The results of the June 4 gubernatorial election in Mexico state only confirmed that Morena is a force to be reckoned with. Though Morena candidate Delfina Gomez Alvarez lost by 3 points to Alfredo del Mazo Maza of the Institutional Revolutionary Party (PRI), she outperformed candidates from the National Action Party (PAN) and the Party of the Democratic Revolution (PRD) by double digits.

It is clear that Lopez Obrador can plausibly win the 2018 election. The obvious question foreign observers are now asking is whether an administration headed by a self-described populist would be substantially different from its predecessors. For decades, elections in Mexico have not significantly changed foreign investors' ability to do business there. The country also has maintained close security cooperation with the United States from administration to administration. The historical dominance of the PRI, which held the presidency from 1929 to 2000, and the predictability of its main rivals, the PAN and PRD, have contributed to this stability. And despite his populist trappings, Lopez Obrador is unlikely to depart considerably from the norm if he is elected president.

A Populist From Within

Unlike some of the more disruptive Latin American leftists, such as Venezuela's Hugo Chavez, Bolivia's Evo Morales and Ecuador's Rafael Correa, Lopez Obrador is not a political outsider. Like other Mexican politicians, he emerged from a populist, nationalist background and rose within the Mexican political system through political connections with established parties. Until 1983, he was a member of the PRI and served as its president in Tabasco state. He subsequently joined the PRD and was its presidential candidate in 2006 and 2012 before forming Morena in 2014.

 

 

If elected president next year, Lopez Obrador would not be leading an anti-establishment movement because he's been a part of Mexico's political scene for nearly four decades. True, Lopez Obrador would be the most populist president elected in the country in decades, and he may want to shift domestic and international policies in a more populist direction. But Mexico's government institutions and political realities would limit his ability to do so. Nor would a Lopez Obrador administration be able to fundamentally change Mexico's relationship with the United States.

Instead, most of a Lopez Obrador administration's political impact would be felt at home. Even then, however, several political constraints would restrict his ability to bring about major change. Mexico's divided federal legislature and strong business community would be significant obstacles to implementing elements of a heavily populist agenda, such as raising corporate taxes or enacting substantial social programs that would require government funding. Without congressional support, Lopez Obrador would be able to swiftly enact change only through government entities subordinate to the presidency. This would put some aspects of Mexico's ongoing energy reform at risk, because the president has the power to slow bidding rounds.

On the security front, Lopez Obrador also would face formidable challenges to fulfilling his campaign promise to withdraw the armed forces from public security duties. Criminal activity would worsen significantly if the military were pulled back entirely, and such a move would doubtless trigger a disagreement with the United States.

Congressional Constraint

Meanwhile, Congress will be the main impediment to any major changes to Mexico's political priorities. Legislative actions that could hurt private interests in the country and abroad, such as tax hikes and sweeping regulatory changes, would have to pass through Congress. Divisions in Congress, which reflect the political divisions within Mexico as a whole, will likely lead to legislative fractures. As a relatively new party with few well-established support networks, Morena is unlikely to gain significant representation in either the Chamber of Deputies or the Senate. Even with alliances, it would be very difficult for Morena to gain a clear majority in both houses of Congress, since PAN and PRI are still quite popular nationwide. Without a majority to fast-track legislation, Lopez Obrador would have to rely on the much slower process of building consensus for any substantial reforms. Unpopular proposals, particularly those harmful to the interests of Mexico's business community, would be difficult to even bring to a vote, let alone implement.

Despite likely being blocked in the legislature, Lopez Obrador can still leave his mark on Mexico's energy reform. The president has the ability to freeze bidding rounds on oil and natural gas — a threat Lopez Obrador's aides already have floated on the campaign trail. Such a decision could be made if the administration determined that the federal government's take of oil revenue was too low. While such threats have to be taken seriously, criticizing energy reform is a potent campaign tool for Lopez Obrador — he has advanced in the polls by appealing to populist sentiment against fuel price hikes, for example — and there is no clear motivation for him to act on his criticisms if elected.

Letting NAFTA Talks Be

The renegotiation of parts of the North American Free Trade Agreement (NAFTA) could begin within months and may stretch into the next president's term. Lopez Obrador's stance toward NAFTA negotiations is unlikely to be much different from that of current President Enrique Pena Nieto, even if his political rhetoric toward the United States and U.S. President Donald Trump becomes more aggressive. The political establishments and business communities in Mexico and the United States are keenly interested in the prompt, successful renegotiation of parts of NAFTA. Any attempt by Mexico's president to alter the talks and put their success in doubt would be met with quick resistance from key business groups in the country — and would lead to frequent spats with other political parties and gridlock in Congress for Morena. Therefore, it's more likely that Morena would permit the NAFTA negotiations to unfold largely as they would under Pena Nieto, even if the party publicly adopts a more aggressive tone toward the United States.

Lopez Obrador's proposals for national security are another area where campaign promises probably will meet reality with disappointing results for Morena. Lopez Obrador has discussed withdrawing the armed forces from Mexico's 10-year struggle against organized crime in favor of civilian institutions. But the lack of a qualified or large enough civilian security force to take over policing duties in some of the more dangerous parts of the country, such as Michoacan, Guerrero, Tamaulipas, Veracruz and Chihuahua states, will make implementing this approach difficult. Pena Nieto's administration maintains tens of thousands of troops deployed against organized crime, much as Felipe Calderon's administration did before it, because there is no other institution capable of being deployed as widely or as efficiently as the armed forces. Public safety in some of the country's more dangerous areas would deteriorate quickly if the military were to leave.

Mexico's use of troops to target criminal groups is also a key component of the U.S. strategy to counter drug trafficking across its southern border. Moves by Mexico to sharply reduce the military's counternarcotics activity would be met with quick resistance from Washington. With no sizable security force available to take over from the military, Lopez Obrador will have to choose another path. It's more likely he would leave the status quo in place or try to selectively withdraw or legally regulate the use of the armed forces in public security duties rather than oversee a broader withdrawal of the military from the drug war.

Though a Lopez Obrador victory would be a historic event for Mexico (after all, only two parties have occupied the presidency since 1929), any deviations from the country's current political and economic path would likely be minor. Mexico's fundamental relationship with the United States would not change, even if the rhetoric between the United States and Mexico does. So while Mexico's increasingly competitive political scene now makes the regular transfer of power between parties the norm, next year's election does not portend any significant changes to the country's present policies.

 

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